“And here’s their recommendation from a year ago”

A policy that completely made sense in the face of events at the time – I don’t think it is fair to expect the RBNZ to anticipate a policy failure on the part of the Fed 🙂

“Truth is that these IMF teams just listen to what policy makers are already doing, then parrot it back as ‘advice’.”

Indeed – that is often the case. However, the RBNZ has stated that it was quite strongly against quantitative easing in March – if they have already changed their mind I would be surprised …

“The current stance of monetary policy is appropriate. During 2007, retail mortgage rates became more responsive to the official cash rate, and this is having the desired effect of moderating house price inflation and slowing overall activity. More recently, tightening international credit conditions have also contributed to mortgage rate increases that should help ease capacity pressures. With significant risks present, the authorities and staff agreed that monetary policy should remain on hold pending clearer indications of the future path of the economy.”

Truth is that these IMF teams just listen to what policy makers are already doing, then parrot it back as ‘advice’. So if the IMF are ‘recommending’ that the RBNZ look at quantitative easing, you can be fairly sure that they’re already laying the groundwork.